Failure To Use Good Faith Did Not Affect Right To Return Of Deposit

Shaker v Vistajet Groups Holdings SA [2012] EWHC 1329 (Comm)

Under a letter of intent for the purchase, operation and repurchase of an aircraft. Shaker paid a deposit to Vistajet. Shaker agreed to "proceed in good faith and to use reasonable endeavours to agree, execute and deliver certain documents by a cut off date". Vistajet was to refund the deposit within five days of the cut off date where the "seller and buyer, despite the exercise of their good faith and reasonable endeavours, failed to reach agreement...". Various issues arose: the two for the purposes of this bulletin were whether the LOI made the exercise of good faith etc a condition precedent to the obligation to return the deposit and whether Vistajet was estopped from alleging lack of good faith because the cut off date was amended several times.

The High Court (Mr Justice Teare) ordered the return of the deposit. He doubted that the LOI made the exercise of good faith and reasonable endeavours a condition precedent to the return of the deposit, but even...